Journal entry

A single record of a transaction in the ledger, with equal debits and credits.

Example

Receiving £500 from a customer: cash up £500, accounts receivable down £500.

Important

You rarely write these by hand with modern software, but understanding that every entry has two sides is what makes a balance sheet stop being mysterious.

Related terms

• General ledger — The complete record of every transaction, sorted into the accounts from your chart of accounts. Every report is built from it.
• Trial balance — A list of every account's balance, used to check that total debits equal total credits before producing statements.
• Bookkeeping — Recording every transaction accurately and on time.
• Balance sheet — A snapshot at one moment of what you own (assets), what you owe (liabilities), and the difference (equity).

All 176 terms in the Founder glossary